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Nine Star CEO on new store, expansion and more

By Tiffany MontgomeryMarch 15, 2010 8:12 AM

By TIFFANY MONTGOMERY

Photos by Guiri Reyes

Nine Star has moved and expanded its Los Angeles store and skate park and will celebrate with a huge launch party Saturday that includes bands, appearances by pro skateboarders and lots of food and drinks.

We talked to Nine Star CEO Matt Levenson about the move and expansion, how business is going so far this year, why Nine Star bid on Active during Active’s bankruptcy process and what product he wishes skate brands were making that they aren’t.

Nine Star also operates a store in Mission Viejo.

Why are you moving and expanding the Los Angeles store?

In our old location we got away from some things that are the keys to our success: the authenticity and the experience in our store.

Our lease in our old location was up early last year and as part of our renewal, the landlord made us close down our skate park and said we couldn't do any more events. We immediately started looking for a new location where we could add these key elements back into our store experience.

In our new store we have a huge dedicated parking lot, just for us, where we can put on these events and decided to take one-third of it and dedicate it to our skate park.

How big is the new store? How does that compare to the last store?

The new store is 10,500 square feet of retail space compared to 7,500 in our old store. Then we built a 1,000 square foot mini ramp on the inside that connects and flows to a 2,500 square foot outdoor street set up. We only had a mini ramp in the old store, so this is a big step up for us.

Looks like you are having a big opening launch. Are the vendors supporting the event?

We are extremely excited about the grand opening event scheduled for Saturday March 20th. Vendor support has been key to both our relocation and the grand opening event.

No. 1 on the list when it comes to good brand partners is Volcom. They brought in Year Long Disaster as the headline act for our concert line up that also features the Cold Flamez and RVCA is bringing the Pricks. In addition, Volcom provided our current Featured Artist Zach Egge, whose originals are the visual focal of the store right now.

Also, we floated the event by all the skate brands and Plan B immediately said "this has to be a Plan B event" and signed up Paul (Rodriguez), PJ (Ladd) and (Pat) Duffy for a skate demo in the new ramp.

Most of all we have to give a big shout out to Auna and Hannah from Royal Propaganda PR for putting this whole thing together, without them there would be no event.

Many retailers are pulling back rather than expanding. Tell us why you feel comfortable making this investment now.

First, to say we are expanding isn't exactly correct. The store is bigger, yes, but the cost structure i.e. rent is actually about 25% less.

We had delayed and delayed this move not wanting to make the capital investment, but we felt we couldn't wait any longer and needed to reinvigorate our store with the excitement we always strive for. You can only hunker down so much, if you don't have the specialty as a specialty retailer than there ceases to be a place for you to exist.

How is business in general?

We've had a great start to 2010, January was phenomenal and February was good with big gross margin dollar growth. For us, there's a huge focus on this move and making our customers aware of the new location, so we have some unique challenges that also creates the unique opportunity to reinvigorate our brand.

First, we've seen a trend in apparel to basics - solids vs. the art driven graphic tees. There have also been downward pressure on price points, logo tees now retail for $20 and artist tees for $25 versus $25 and $30 respectively in prior years.

Additionally, we have pushed to provide a tiered priced offering for our customer the last 12 months so we've layered in private label product in apparel, skate decks and surfboards and tried to maintain an entry price point in the other categories. At the same time, we always need to push in the best, newest and hottest unique products that draw in our core customer.

I noticed that Nine Star was at the auction for Active. Are you looking for other potential store acquisitions?

We are always looking for opportunities to expand our business in anyway that makes sense for our brand, mission and shareholders.

Is there one thing you wish skate brands would do that that they aren't at the moment? Maybe a category, a price point, or other business opportunity you see?

We've seen customers asking for skate hardgoods brands apparel much more lately. The more the hard goods guys develop their soft goods offerings, the better it is for all of us as its an add on sale for the core participant at a higher margin.